adminMartin Kadzere Harare Bureau
THE Auditor-General’s report for 2014 has once again exposed serious governance deficiencies within the government bordering on fraud, lack of accountability and transparency.
Governance weaknesses were observed in areas of internal controls of financial resources, record keeping, diversion of resources from fund accounts to ministries, reconciliations, late submission of fund accounts and management of government properties and resources, Auditor-General Mildred Chiri said in her latest report.
If the deficiencies are not urgently addressed, they would continue draining “critical resources” while failure to pay for goods and services on time may attract litigations.
The report outlines material findings noted during the audits of ministries’ appropriation, Fund Accounts and the Public Finance Management Systems which processes financial transactions and produces reports for all government ministries.
The audit reveals that 13 of the 27 audited ministries had differences between amounts reflected on sub-payments general accounts and the Public Management System.
It says most of the ministries attributed the differences to direct payments amounting to $179,8 million made to service providers by the Treasury on behalf of the ministries.
However, some payments were not supported by invoices and receipts from providers.
Said the Auditor-General: “Failure to reconcile these two accounts might compromise the accuracy of the expenditure figure disclosed in the appropriation account.”
The report states that ministries did not submit departmental asset certificates.
In some instances, the availed master assets register and property registers were not updated as most procured assets did not appear in the registers. Furthermore, some Fund assets were not revalued after dollarisation and the values were not included in the financial accounts.
The absence of adequate records had also the effect of limiting the scope of the audit.
On internal control systems, the audit report says the majority of the ministries were yet to establish audit committees. This resulted in some ministries losing between $24,000 and $204,000 through fraudulent activities. There were also some weaknesses observed in revenue collection and debt recovery, which resulted in an amount of $95 million as at December 31, 2014 being owed to the government, an increase of 90 percent compared to 2013. The debts were in respect of various debtors, long standing travel and subsistence advances, outstanding revenue, disallowances, investment locked in financial institutions and loans to local authorities.
The audit notes that goods procured by some ministries three years ago, and paid for, have not been delivered while other ministries continued violating tender procedures when purchasing goods.
It is further revealed that some Fund Accounts continued paying workers who had expired contracts.
Most of the irregularities were revealed in the previous audit but most ministries were not taking action “hence some of the weaknesses remained unresolved.”
There were variances between balances reflected on the return from ministries and from Treasury. The closing balance as per line ministries was $619,7 million against $295 million on the treasury return resulting in a net difference of $324,7 million.
It was also noted that at times, the Ministry of Finance and Economic Development, made direct payments to State enterprises and on a number of occasions, documents pertaining to such transactions were not availed to line ministries
Year end balances reported by Ministries and Treasury had variances that remained unreconciled to the time of concluding the audit. Comparisons of the amounts disclosed in Treasury consolidated return and line Ministries returns showed significant differences as follows; take on balances had variances of $146,6 million, collections differed by $15.8 million, payments to the main Exchequer Account by $15,6 million and payments of other accounts had a variance of $383,425.
Furthermore, total disbursements to the main Exchequer Account by line Ministries differed with balances in PFM systems by $28,5 million. There were huge variances in revenue collection and disbursement balances at year-end between Ministries and Treasury figures. Treasury reported total collections for the year under review amounting to $3,89 billion while ministries reported collections totaling $3,77 billion giving a variance of $119 million. With regards to disbursement to the Exchequer Account, there was a difference of $112,3 million between the Ministries’ figure of $3,28 billion and the Treasury figure of $3,40 billion.
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